Kwasi Kwarteng named as new Chancellor
In her first big decision as prime minister Liz Truss has named Kwasi Kwarteng as the new Chancellor of the Exchequer.
Kwasi Kwarteng, who previously held the position of business secretary, moves into Number 11 with a daunting in-tray that includes rising inflation and a raft of tax cuts and reviews promised by the new PM during her leadership campaign.
On the campaign trail, Truss discussed cutting VAT to 15%, reversing the national insurance hike brought in under Sunak, cancelling the planned corporation tax rise from 19% to 25%, and saying that she would review IR35 and the loan charge.
In his first days in the post, the loyal supporter of Truss throughout the campaign will have to mull over these pledges and how they will fit into any long-term tax plans. However, he has the option of pulling the trigger on an emergency Budget, with the Office of Budget Responsibility working behind the scenes throughout the summer on the forecasting if the new Chancellor calls on them.
But with a spiralling cost-of-living crisis to deal with, Truss is expected to unveil her package to stem the surging energy prices tomorrow (Thursday 8 September).
Fiscally responsible
With a PhD in economic history from the University of Cambridge, the new Chancellor wrote in the Financial Times this week that the Truss government would be “fiscally responsible”.
“As prime minister, Liz will take immediate action if elected that will help people with the challenges we face in the coming months, and lay the groundwork for the change we need in the long term. This means cutting taxes, putting money back into people’s pockets and unshackling our businesses from burdensome taxes and unsuitable regulations,” he wrote.
Kwarteng has featured on the pages of AccountingWEB recently as the business secretary, where he oversaw the overhaul of the audit sector, which included the introduction of Audit, Reporting and Governance Authority (ARGA) as the replacement of the Financial Reporting Council (FRC) and plans to break up the Big Four’s dominance.
However, his “watered down” audit shake-up attracted criticism on AccountingWEB for being a “missed opportunity”.
Former Chancellors
Kwarteng replaces Nadim Zahawi, who only held the position since July after ex-Chancellor Rishi Sunak quit the government saying that his approach was “fundamentally too different” from that of former prime minister Boris Johnson.
Despite only being Chancellor for the summer, Zahawi’s short tenure has faced accusations of “dodging scrutiny” over questions of his tax affairs. Tax lawyer Dan Neidle raised flags over an offshore family trust Zahawi used to set up YouGov. Neidle’s calls for the then Chancellor to answer questions over his tax affairs were hit back with legal letters.
